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FTG-run MCX’s head Shreekant Javalgekar submits papers

The Crisis-hit Financial Technologies Group (FTG) has had another top-level exit, with the flagship Multi Commodity Exchange of India (MCX) on Saturday saying that Managing Director and Chief Executive Officer Shreekant Javalgekar has resigned. ‘Javalgekar has submitted his resignation as MD and CEO of the company, subject to the approval of the board,’ MCX said in a filing to the BSE.

Jignesh Shah-led Financial Technologies Group, which runs the MCX, the MCX Stock Exchange and the National Spot Exchange Ltd (NSEL), has seen a churn at the top level since the NSEL was plunged into a payment crisis in August. Shah and MCX Stock Exchange MD and CEO Joseph Massey resigned from the board on October 9, just before a Sebi-ordered extra-ordinary general body meeting.

The Forward Markets Commission had issued show cause notices to Shah, Javalgekar and Massey on October 4, questioning their ‘fit and proper’ status to operate MCX and had asked for responses by October 18. The officials had sought a one-month extension to reply to the notices, sources said on October 16.

An MCX spokesperson said Javalgekar resigned due to personal reasons. Javalgekar has headed the country’s largest commodity bourse since July 1, 2012, and was responsible for all aspects, including financial management, investor relations, corporate governance and strategies. Prior to this, Javalgekar was finance and communications director at parent firm Financial Technologies. The MCX board will meet next Tuesday to discuss the appointment of independent and institutional shareholder directors and a new managing director, the spokesman said.

Financial Technologies holds a 26 per cent stake in the commodity exchange. FTIL also owns the NSEL, which is facing a Rs 5,600 crore payment crisis after the exchange said on July 31 it had halted trading.

Earlier, claiming innocence, former head of the National Spot Exchange Limited (NSEL) Anjani Sinha, held in the Rs 5,600 crore payment crisis, has said that he was acting under the board’s pressure, sources said. The Economic Offences Wing (EOW) of Mumbai police produced Sinha before local court on Friday which remanded him in police custody till October 31.

Reacting to Sinha’s allegations against board members including promoter Jignesh Shah and senior Group Executive Joseph Massey, an NSEL spokesperson said, ‘The charges should not be taken at face value.’  During the interrogation, Sinha stated that his actions may have led to the present crisis, but he was acting under pressure. ‘He has submitted an affidavit before us but it will not have any evidential value. He did not name anybody in his affidavit,’ an investigating officer of EOW said.

‘However, during the interrogation he shifted the blame on to the board of NSEL, saying whatever he has done was under duress,’ the officer said, adding, ‘We are cross-checking his revelations with whatever had come out during the interrogation of Mukherjee and Bahukhundi.’ ‘Our auditors are also verifying the books of accounts of various defaulters to figure out how much they owe to NSEL and vice versa,’ the officer said.

Meanwhile, the court extended police custody of the other two NSEL functionaries arrested in the case — former AVP Amit Mukherjee and former AVP in-charge of the KYC department Jay Bahukhundi —  till October 23, the police informed.
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